Take-Two announces tender for Zynga’s 0.25%, 0% convertible notes

By Wendy Van Sickle

Columbus, Ohio, May 23 – Take-Two Interactive Software, Inc. announced its wholly owned subsidiary, Zynga Inc., has begun tender offers to repurchase any and all of its outstanding 0.25% convertible senior notes due 2024 and 0% convertible senior notes due 2026, according to a news release on Monday.

The tender offers are required to be made as a result of the transactions consummated on May 23 that saw Take-Two acquire Zynga, which constituted a fundamental change.

The repurchase price will be par plus, in the case of the 2024 notes, accrued interest to the repurchase date.

Holders also have the right to convert their notes until June 22 into units of reference property equal to the consideration paid to holders of the old Zynga common stock in the combination of $3.50 in cash and 0.0406 shares of Take-Two common stock per share.

During the fundamental change conversion period, the conversion rate for the 2024 notes will be 137.3699, which includes a make-whole based on the average last reported sales prices of old Zynga’s common stock over the five trading-day period ended on May 20, and as a result, each $1,000 principal amount of 2024 notes will be convertible into 5.5772 shares of Take-Two common stock, with cash paid in lieu of the fractional shares, and $480.79 in cash.

During the same period, the conversion rate for the 2026 notes will be 76.5404, and as a result, each $1,000 principal amount of 2026 notes will be convertible into 3.1075 shares of Take-Two common stock, with cash paid in lieu of any such fractional shares, and $267.89 in cash.

Holders of the 2026 notes will not be entitled an increase in the conversion rate because the average last reported sales prices of old Zynga’s common stock over the five trading-day period ended on May 20 was less than the minimum price per share that is required for holders to be entitled to receive an increase in the conversion rate.

The tender offers expire at 5 p.m. ET on June 22. The repurchase date will be June 23.

Computershare Trust Co., NA is the trustee, paying agent and conversion agent.

New York-based Take-Two and San Francisco-based Zynga are developers of interactive and mobile entertainment.

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